Crypto Fund Inflows Persist Despite Slowing Momentum

The cryptocurrency market has witnessed inflows into investment products for the third consecutive week, albeit at a reduced pace. From October 7 to October 13, the inflow amounted to $15.2 million, a significant drop from the previous week’s $78.4 million.

CoinShares analysts highlighted that this figure is 27% below the average for 2023. They pointed out that the data does not factor in the positive sentiment generated by the SEC’s decision not to challenge the court ruling on Grayscale Bitcoin Trust’s transformation into an ETF. This decision has bolstered the likelihood of the product’s launch, as per industry experts.

Bitcoin (BTC) funds saw inflows of $16.4 million, a decline from the previous week’s $42.7 million. Interestingly, products allowing for short positions on Bitcoin attracted $1.7 million, up from $1.2 million the week before.

Conversely, Ethereum (ETH) funds experienced an outflow of $7.4 million. This comes after a previous week’s inflow of $10.2 million, which coincided with the commencement of Ethereum-ETF futures trading. Analysts speculate that this shift might be attributed to “ongoing challenges with the protocol’s development.”

Solana-based products attracted $3.7 million, a decline from the previous week’s impressive $24 million, which was the highest since March 2022. XRP funds maintained their positive streak, marking inflows for the 25th consecutive week, albeit at a modest $0.42 million.

On the other hand, funds based on Tezos, Litecoin, and Chainlink witnessed outflows of $0.25 million, $0.28 million, and $0.31 million, respectively.

To put things in perspective, just a week prior, the cryptocurrency market had drawn a robust $78 million, marking the highest inflow since July 2023, with Bitcoin being the primary beneficiary.

While the momentum of inflows into crypto funds has slowed, the continued interest underscores the resilience and evolving dynamics of the cryptocurrency market. As regulatory landscapes shift and new developments emerge, it will be interesting to observe how these inflow patterns evolve in the coming weeks.

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